While Hurricane Sandy has raised questions about how employers should compensate employees whose ability to work was severely disrupted, attorneys say they don’t expect to see many of those questions tested in court.
In the wake of the storm, businesses up and down the East Coast were closed for a host of reasons, including lost power, physically damaged buildings, and disrupted transportation systems that made it impossible to commute.
Other businesses continued to operate with limited staff or with employees working remotely. Some remain closed as the recovery continues.
Neither New York nor federal law, however, makes explicit provisions for affected employees, unless they are protected by a contract.
“If you don’t work, you don’t get paid,” U.S. Department of Labor investigator David An told an audience of employers at a Nov. 14 panel hosted by Arent Fox.
Still, employment attorneys say they expect employers to be understanding in light of the situation.
Robert Gosseen, a partner at Ganfer & Shore, spoke for most of those interviewed: “Many employers, I suspect, will be making accommodations.”
The range of situations that arose after Sandy were often unanticipated, and the answers to the questions they raise may depend on whether those affected are hourly employees subject to overtime pay laws, or so-called “exempt” or salaried employees, who are not.
The simplest scenario involves an office that is totally closed.
“The tough line is, ‘You weren’t here working, we didn’t plan for this, we made no money, you made no money,” said Robert Sparer, a partner at Clifton Budd.
That applies to hourly employees, who will not be paid for hours they don’t log, and to salaried employees, who may be asked to use leave days—vacation, sick, personal, or other kinds of leave—to make up for time missed.
Even when leave days are exhausted, employers can reduce exempt employees’ pay for full days not worked, although “they have to tell people in advance that that’s what they’re going to do,” said David Schwartz, a partner at Skadden, Arps, Slate, Meagher & Flom.
Gosseen added, however, that he did not expect most employers to pay their employees the minimum required under the law, or for a wave of wage-and-hour suits to appear in the storm’s wake.
“Most employers will do the right thing,” he said. “There’s not enough at issue. You’ve just got to write off those two or three days. They’re just gone.”
Geoffrey Mort, an attorney at Kraus & Zuchlewski who represents employees, also said he did not expect employers to take a hard line on pay.
“Employers have been pretty good about this,” he said, though he added that “it would not surprise me if there were some” who paid only the bare minimum.
Things become more complicated when employees try to work, but are partly or totally unable to do their jobs.
If employees fail to do any work, employers do not have to compensate them, no matter how much time or money they may have spent trying to get to work.
“Generally getting to and from work is not compensable time,” Schwartz said.
“If an employee tries to get to work but fails, they haven’t worked,” Sparer said. Still, he said, many employers likely made accommodations for employees who could not get to the office.
“A lot of employers, I think, are giving consideration for efforts to come in, and special consideration for success in coming in, and no consideration for not bothering to come in,” Sparer said.
Gosseen said that employers might be liable for Workers’ Compensation benefits if employees were injured trying to get to work, even if they never made it, though it would depend on the facts of each case.
If employees do get to work but aren’t able to put in full days, their pay depends on their status. Hourly employees must be paid at least four hours per day at minimum wage, even if they only work for half an hour. Salaried employees must be paid for the full day.
Employees who had electricity and Internet access were able to work from home, which is compensable in the same way as work done from the office, attorneys said.
Working from home presents a special difficulty for hourly employees, since there is no way to track their hours.
“For the most part, they’re going to be on the honor system,” Schwartz said.
Sparer noted that, under the federal and state wage and hour laws, “the obligation for record-keeping falls on the employer, not the employee.”
“It’s incumbent upon the employer to seek that information if they have hourly employees who they believe have worked,” he said.
Sparer also said that if any dispute does arise over hours worked remotely, courts and the U.S. Labor Department would likely take the employee’s word, “unless the employer can show that it’s totally nonsensical.”
Another issue, from the employer’s point of view, is a practical one—getting out paychecks. Technically, employers who fail to pay employees on time because of the storm run afoul of the law, Gosseen said. But he added he did not expect employers to face legal action over slight delays.
“Assume that if you do your best to get the pay out, you’ll be OK,” he said. “Technically, it’s a violation of the law.”
Finally, the situation will be completely different for union employees, whose terms of employment are governed by their contracts.
“If it’s a union situation, you’ve got to look at the union contract, and that can be very variable,” Sparer said.
Despite the various legal issues, attorneys agreed there would not be a major wave of litigation over pay after Sandy, since most employers were responding humanely to the crisis.
“There’ll probably be one or two little spats here and there,” Sparer said.
Gosseen agreed that a majority of employers would make allowances. Still, he said, “there are employers who will take hard lines.”
“I had some of my clients who called me and wanted to take hard lines,” he added. “I told them I thought it was crazy.”
@|Brendan Pierson can be contacted at firstname.lastname@example.org.